September 15, 2008

The Invisible Hand

I had to laugh reading some leftists bitching about McCain's reaction to the stock market events. Now he may or may not understand much about it or how to fix it (er, in the case of government maybe I should say stop fixing it so it can work already) and I suspect it's the latter. That doesn't mean the ones criticizing him understand what they're talking about either. Actually, they definitely don't.

However, we'll just take a step back from "both" sides and marvel for a moment at the invisible hand and the work it does. "The Glories of Change" by Jeffrey Tucker of the Ludwig von Mises Institute (Austrian - one of the few schools of economic study that have any validity) will give a fresh perspective here. I'll only quote briefly; please go read it for yourself.

"No one person is in charge. Layers upon layers of decisions by millions and billions of people are the essential mechanism that makes the process move forward. All these decisions and choices and guesses come to be aggregated in a single number called the price, and that price can then be used in that simple calculation that indicates success or failure. Every instant of time all around the world that calculation is made, and it results in shifts and movement and progress.

But as wonderful as the daily shifts and movements are, what really inspires are the massive acts of creative destruction such as when old-line firms like Lehman and Merrill melt before our eyes, their good assets transferred to more competent hands and their bad liabilities banished from the face of the earth.

This is the kind of shock and awe we should all celebrate. It is contrary to the wish of all the principal players and it accords with the will of society as a whole and the dictate of the market that waste not last and last. No matter how large, how entrenched, how exalted the institution, it is always vulnerable to being blown away by market forces — no more or less so than the lemonade stand down the street."

Interesting stuff. You won't hear that in the NY Times.

For shits and giggles I might take a minute to groan and or giggle to myself about how these things bring out every variety of stupid and silly comments. First McCain was quoted: "You know, that there’s been tremendous turmoil in our financial markets and Wall Street and it is — people are frightened by these events. Our economy, I think, still the fundamentals of our economy are strong. But these are very, very difficult times."

Oh...groan. Now I can spot lots of things wrong with those few sentences. Immediately they call to mind, as well, just how and why things got there - knowing all the time that what he means by things being bad, and what the left means, and what the reality is, are three different things.** Just for one example of the ways in which any leftist commentary on McCain's statements (not necessarily indicative of conservative) about economy are a hotbed of miscommunication and wrongness on both sides.

Then follows a litany of economic woes (seen through the eyes of the left) ending with quite an example of melodrama. Now this is definitely something I don't like about McCain; he's probably not very knowledgeable on economics and unfortunately he's not really conservative either (conservatives will often tend to do more right economically even if they don't really always understand why, than the left could ever do - being fundamentally socialist in nature) so he *plays right into the hands of* the left by agreeing that things are very very bad and dire indeed. That's the problem with being "moderate" which is often worse than being either left or right. Moderates are generally willing to cede liberty on the social and economic end, a little at a time, while conservatives tend to cede more social liberty than economic (which at least leaves the people strong enough to fight for their rights) and the left generally cedes economic liberty and then as Atlas shrugs and everyone grows poorer, we have to cede social liberty as well. Not to mention the oppressive restrictions imposed by political correctness on free expression regarding religion and any number of matters of individual social liberty. But we'll see, right?

"And don't think for a minute that the current administration is not going to do everything possible to keep things propped up until election time. After that fateful day, who knows what will happen to the likes of Lehman Brothers, or the likes of American citizens for that matter."

Oh...groan. That was the melodrama. And did a leftie just express concern for a huge corporation and for other huge corporations? The litany of woes was just your standard stuff - you can probably read it in any newspaper and you probably know it by heart. Though it's always funny to see socialists complaining about it. Maybe that's just me.

Well, enjoy the Glories of Change piece. Like I said, Lew Rockwell and I parted company some time ago, but you can hardly beat von Mises for a reality check.

**And that isn't even counting the conservative viewpoint. There might be more, but who cares? At any rate, this is one reason the mainstream media sucks. You can get the left (ubiquitous) and you can get the right (a little bit) but you can't get the truth. And that's one reason people on "both" sides are frightened, as McCain put it, albeit by different things.

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